‘Hockey Stick’ spending hikes make even less sense now


Last October, the House Ways and Means Committee approved, along party lines, legislation to extend and expand the Health Profession Opportunity Grants (HPOG) program.  HPOG is one of more than 40 federal education and training programs and provides low-income individuals training for high-demand healthcare jobs. The most substantial change in the committee legislation was to increase annual HPOG program funds from $85 million to $425 million, which creates a funding graph that resembles something like a hockey stick. But a new HPOG program evaluation — released just weeks after the committee acted — argues strongly against such increased funding, since it shows the program hasn’t produced any detectable impacts on participant earnings, a key goal.

That’s not what committee Democrats expected when they acted to increase program funds fivefold. They suggested a prior study of the program “found strong positive outcomes associated with educational progress, employment outcomes, and earned income.” But the November 2017 study the committee report references doesn’t go that far. Instead, its authors note the study only “describes what HPOG participants experienced after enrolling, but does not establish causality or evidence of effectiveness.” In the end, the November 2017 study urges “longer-term studies” that “will help confirm whether the positive trends in career progress observed here continue over six years after program entry, and whether those trends represent an improvement over what would have occurred in the absence of HPOG.”

Just such a longer-term study was released in December 2019, a few weeks after the committee acted. This study found that, predictably for a training program, “As of the three-year follow-up, more HPOG participants had completed occupational training than would have without HPOG.” But tellingly those “HPOG Program impacts on educational progress have not resulted in earnings impacts.” Indeed, while the program “had impacts on employment rates, employment in healthcare, job quality and career progress,” it “had no detectable impacts on quarterly earnings in the 12th-13th quarters after random assignment.”

Source: https://www.acf.hhs.gov/sites/default/files/opre/hpog_three_year_impacts_nov_2019.pdf
Notes: HPOG applicants were randomly assigned to treatment groups (blue), which had access to the HPOG program, and control groups (gray), which did not.

The charts above show how “both earnings and employment, respectively, increased substantially over time for both the treatment and control groups.” Yet the “treatment group outcomes were no better than the control group.” The similarity of the trajectories (setting aside the HPOG group’s early-on “lower levels of earnings and employment than the control group, likely due to the treatment group’s greater participation in training”) means the HPOG program made no discernible difference in earnings. That is despite program grantees spending an average of over $9,000 per program enrollee.[1]

Other outcomes were equally disappointing: “HPOG did not decrease public assistance use overall. Forty-eight (48) percent of the treatment group received TANF, SNAP, or Medicaid in the month prior to the three-year survey, compared to 46 percent of the control group.” HPOG participation also “had no detectable impact on personal or household income” counting all sources, and “did not have detectable impacts on our measures of child development or well-being.”

As the December 2019 study’s authors note, perhaps “more time is needed” as three years “is not enough time for impacts on labor market outcomes to materialize.” Those longer-term outcomes will be included in a report to be released in 2021. Meanwhile, this latest study provides more cause for pessimism about the effectiveness of government education and training efforts in general, and the HPOG program in particular. Unfortunately, while lots of people support helping low-income adults get more education and training as a way to improve their earnings, there is little evidence suggesting that approach actually works.

Until the longer-term study is available, the December 2019 study argues strongly against adopting “hockey stick” increases in future HPOG program funding. Lead committee Republican Kevin Brady (R-TX) stated in October we should not be moving forward with any reforms to the program until we have a full evaluation of its effectiveness,” and he’s right. Later in December, Congress approved as part of its end-of-year spending bill a simple extension of current HPOG funding through May 2020. Until data shows the HPOG program actually improves earnings, current funding is the very most Congress should provide.

[1] Initial estimates of grantee costs per participant ranged from under $5,000 to more than $30,000, depending on intensity and type of services offered. A subsequent report showed that grantees enrolled 36,624 program participants and collectively received approximately $335 million in grant dispersals over five years of operation.

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